Using the Personal Consumption Expenditures (PCE) index instead of the CPI, as is more common, would strengthen this argument, as it shows inflation 0.3-0.5% po

Using the Personal Consumption Expenditures (PCE) index instead of the CPI, as is more common, would strengthen this argument, as it shows inflation 0.3-0.5% points lower per year than the CPI [1]. In my view (and the Federal Reserve's) the PCE is a better measure of standard of living, since it adjusts more aggressively for changes in the quality of goods and changes in the basket of goods people purchase -- i.e. it better adjusts for the emergence of things like iPhones. So growth, both in wages, and in general would look a bit better under the PCE deflator. Regardless, you're still at a low rate of growth, not deflation. If labor force participation was the issue, we'd see that trending up, which we do a bit, but not much. One other theory somewhat consistent with the data is that we're seeing downward pressure from automation, yet if that was true productivity should be rising faster. [1] https://www.clevelandfed.org/newsroom-and-events/publications/economic-trends/2014-economic-trends/et-20140417-pce-and-cpi-inflation-whats-the-difference.aspx https://www.clevelandfed.org/newsroom-and-events/publication...